Summary
- BNP Paribas is currently overvalued, trading at a 9-10x P/E versus its historical 7-8x, despite limited growth prospects.
- I maintain a conservative €82/share price target and a ‘Hold’ rating, seeing limited upside at current valuations given Eurozone’s sluggish growth.
- BNPQY’s high cost ratios (58-62%) and structural limitations hinder efficiency, making premium multiples unjustified versus leaner European peers.
- Core profit growth is lackluster, with recent gains driven by one-off M&A, not sustainable core banking improvements.
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I sold off my last shares in BNP Paribas (BNPQY) early this year, when the company hit significant highs. It dropped down to about 7-8x P/E, but I did not reinvest at the time, but stuck
Analyst’s Disclosure: I/we have a beneficial long position in the shares of EBKDY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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